On Saturday, Charles Carreon updated his federal lawsuit against Matthew Inman (creator of the humor website The Oatmeal). Carreon's suit now calls for a temporary restraining order, asking the court to mandate IndieGoGo not transfer any of the more than $220,000 raised as of Monday, June 25. If the court sides with Carreon, funds would not go to Inman or to the target charities, the National Wildlife Foundation (NWF) and the American Cancer Society (ACS).

“If IndieGoGo pays Inman the money in the Charitable Fund, and Inman personally donates the money to NWF and ACS, he will be unjustly enriched by receiving a large tax write-off that should properly be allocated pro-rata to the 14,406 small donors who contributed to the Charitable Fund,” Carreon writes. “Pilfering very small amounts of money from very large numbers of people is a stock mechanism for conducting computer and Internet fraud. Preventing Inman from exploiting the giving public in such a fashion is in the public interest.”

Inman previously wrote this week on his own website that once this “silly bullshit [gets] dismissed,” he should have the money from IndieGoGo in “about a week.”

“Once the money is moved, I still plan on withdrawing $211k in cash and taking a photo to send to Charles Carreon and FunnyJunk, along with the drawing of FunnyJunk's mother,” he wrote. “After the photo is mailed I'll be sending checks to the charities. I'll also post receipts as well as public confirmations from both charities that they received every penny that was promised.”

The updated filings also reveal that Carreon himself donated $10 to the so-called “BearLove campaign,” as a way to gain standing for himself. Ars was alerted of the new filings on Saturday night by Adam Steinbaugh, a Los Angeles-based recent law school graduate. The entire FunnyJunk/The Oatmeal affair is a twisted tale of how the legal system can be used to make intellectual property and defamation claims against bona fide humorous and satirical websites.

Nearly a month of Carreon's legal wranglings

Inman, of course, was the original target of Carreon’s legal threats. On June 2, 2012, Inman received a letter from Carreon, in his capacity as representing counsel for FunnyJunk (a rival humor website). The letter accused Inman of defamation and required that he send FunnyJunk, via Carreon, a check for $20,000. Inman then launched what became known as the BearLove campaign as a way to mock this legal threat.

"A minor victory" for Charles Carreon

One of Carreon’s primary complaints against Inman is that he is engaging in a “bait and switch campaign.” This came after Inman announced, due to overwhelming support for the campaign, that he would be expanding the list of target charities.

“Bear Love campaign donors didn’t simply designate Inman to receive and disburse donations according to his liking. We had donated to two charities—ACS and NWF—and no others,” Carreon writes in the June 30 filing. “Thus, I further asked myself: ‘I wonder who those other two charities are that he is talking about? Perhaps they are affiliated with Inman?’”

“It was clear to me that quite aside from the requirements of charitable fundraising law, Inman could not acquire a fund for one purpose and then dispose of it according to his discretion. I and the other donors had a right to have our donations go to ACS and NWF, and nowhere else.”

In a blog post last week, Inman also states that he will stick to the original target charities “as a way to avoid further litigation.” Inman added: “If Carreon wanted a minor victory, he got one here.“

Carreon's latest filing was written to Inman’s attorney, Venkat Balasubramani, a Seattle-based tech lawyer who has previously been a contributor at Ars. In that, Carreon added he was willing to settle the entire case if Inman would “disclaim all interest.” The offer was declined by Balasubramani to Carreon in a letter dated June 22. Inman is also being represented by the Electronic Frontier Foundation.

Update courtesy of Steinbaugh: the TRO hearing will likely occur this week. Carreon is requesting an OK to attend that hearing telephonically.

Update 2: On Sunday, the Electronic Frontier Foundation, which is representing Inman, also filed an opposition (PDF) to the temporary restraining order. In it, the EFF says Carreon's arguments lack both "merit" and "context."

"The Court should put a stop to such gamesmanship, beginning with the instant Application," the EFF attorneys write. "As explained in detail below, Mr. Carreon has not met and cannot meet the exacting standard for a temporary restraining order. His claims are meritless, he faces no irreparable harm, the balance of equities favors Mr. Inman and the public interest and Mr. Inman’s First Amendment rights would be thwarted by an injunction. Mr. Carreon’s application should be denied."

In the filing, the attorneys add that Inman's actions are protected under the First Amendment, that he is engaged in non-commercial speech, that he is not a commercial fundraiser, and that he did not make any misrepresentations about the nature of the charitable fundraising.

The EFF concludes: "It is obvious that Mr. Carreon made his nominal $10 donation for the primary purpose of fostering his legal argument and attempting to seize control over the fate of the fund, and not out of any genuine support for the [BearLove] campaign. His attempt to interfere with the campaign to raise funds in the name of criticizing the cease and desist letter he wrote for FunnyJunk does not mean he lost money or suffered any legally cognizable injury."

So on top of not knowing how internet cause and effect happens, he doesn't know about expedia.com? Some internet lawyer eh? I just found a roundtrip ticket for $271 (less than court filing fees) to SF and back for him. Just saying.

I'm no tax lawyer or anything, but wouldn't the $220K deduction only cancel out the tax on the $220K of extra "income" Inman would have to otherwise report? I don't see how any of this benefits Inman (at least financially).

I'm no tax lawyer or anything, but wouldn't the $220K deduction only cancel out the tax on the $220K of extra "income" Inman would have to otherwise report? I don't see how any of this benefits Inman (at least financially).

Carreon is fixated on the idiotic idea that Inman plans/planned to keep some of the money. It could also be a reference to the scrapped idea that Inman would get the money, then pick two more charities to fund with it, in effect Inman would get control of the money first and thus have to be taxed.

Ok, so I'm not a lawyer or a tax expert, but I have worked in both fields. As far as I can tell, because Inman is not a charitable organization himself, he will be 1099'd for the distribution from Indiegogo and will have to declare the money as income, and then write it off as a charitable contribution -- which has a limit of 50% of his gross income. Unless Inman's regular income is at least 2x the Indiegogo distribution, this is a losing proposition for him.

I'll admit to being a bit wobbly on all of the details and how the math shakes out -- if someone (some SANE one, not Carreon) has a better analysis, I'd love to hear it.

This Carron fellow really, really seems to hate Inman. the whole thing I'd so ridiculous though. He's so worried about Inman benefiting in any way from this, but honestly (and I can't see it being significant) if he does gain something, all the power to him. Dude raised a quarter of a million dollars for charity, and did so instead of pursuing a lawsuit of his own.

Why is this all happening again? FunnyJunk's feelings got hurt when he told everyone how they stole his material? I'm getting dizzy.

It's got nothing to do with FunnyJunk anymore. Everything recently has been FunnyJunk's lawyer acting on his own, representing himself. He's just epically butthurt and trying to lash out against Inman. Each new attempt fails, makes him look like more of an awhile, which just increases his level of butthurtness. I fully expect him to simply go batshit insane or explode any day now.

And here I was absolutely certain that the case against the charities (and indirectly, Inman) would have to be dropped because they were focused solely on the fact that Inman decided to donate to other charities after the fundraiser was started. After Inman decided to go back to the original 2, what else could Charreon possibly file against?

Guess my question was answered. Wonder what other bullshit this dude has up his ass. /no homo <_<

I'm no tax lawyer or anything, but wouldn't the $220K deduction only cancel out the tax on the $220K of extra "income" Inman would have to otherwise report? I don't see how any of this benefits Inman (at least financially).

Carreon is fixated on the idiotic idea that Inman plans/planned to keep some of the money. It could also be a reference to the scrapped idea that Inman would get the money, then pick two more charities to fund with it, in effect Inman would get control of the money first and thus have to be taxed.

Even if that happened, this statement would still be false IMHO (I'm not a lawyer or CPA):"If IndieGoGo pays Inman the money in the Charitable Fund, and Inman personally donates the money to NWF and ACS, he will be unjustly enriched by receiving a large tax write-off that should properly be allocated pro-rata to the 14,406 small donors who contributed to the Charitable Fund"

To gain any benefit, Inman would also have to take on the tax burden of the income, and I can't see any way for him to gain more of a write-off than what he is adding as income. At best he breaks even, at worst as aiken_d notes he is unable to claim all of it and loses money.

> He would then remain the commendable angel that made it all possible, sacrificing only the promised photograph of the cash.

Then Carreon will probably sue him for failing to take the photograph.

Carreon is fixated on the idiotic idea that Inman plans/planned to keep some of the money. It could also be a reference to the scrapped idea that Inman would get the money, then pick two more charities to fund with it, in effect Inman would get control of the money first and thus have to be taxed.

Must be that thing where you suspect others of the flaws you yourself possess. Carreon can't believe Inman is not out for personal gain here, and keeps rooting to find out how Inman could possibly benefit. I'm sure he views himself as a misunderstood hero trying to uphold something or other, but he's really just trying to (intentionally or not) cover for his massive butthurt douchbaggery.

How much of a sense of entitlement does this lawyer have, to file a frivolous lawsuit and then to -- wait for it -- tell the court, "I don't think I should be required to show up"?

P.S. This to Tara (whom I know is reading this): Thanks for the nude-photo emails. But really, you need to lipo some of the fat out of your too-large thighs and put it in your too-small boobs. Also, Westboro Baptist called -- they're offended at how nasty you're acting in public.

Apparently, Carreon's nutty wife thinks all of this is an Illuminati plot of some sort against her douchenozzle of a husband and that Inman's grammar cartoons are actually a guide to avoid paying taxes...

I think she should be locked up. A person that crazy is a danger to others.

Just when I thought he reached rock bottom, he has attempted to start digging...what a toolbag. In my wildest dreams, he gets disbarred for this ridiculous abuse of the justice system.

Also, isn't there anyway for Inman to direct IndieGoGo to reject or return Carreon's donation? If they're acting as his donation agent, it would stand to reason they can accept or reject any donation presented to them. No donation = no standing = dismissal.

Carreon is fixated on the idiotic idea that Inman plans/planned to keep some of the money. It could also be a reference to the scrapped idea that Inman would get the money, then pick two more charities to fund with it, in effect Inman would get control of the money first and thus have to be taxed.

Must be that thing where you suspect others of the flaws you yourself possess. Carreon can't believe Inman is not out for personal gain here, and keeps rooting to find out how Inman could possibly benefit. I'm sure he views himself as a misunderstood hero trying to uphold something or other, but he's really just trying to (intentionally or not) cover for his massive butthurt douchbaggery.

I don't even think it is that complicated.

He was humiliated in public, has so far found no recourse, and as such is going to file frivolous lawsuits to make himself look in the right.

This is what little children do when they don't get their way in the playground.

It will be really, really interesting to see just how badly this damages Carreon's career - and I don't even mean the "looking like an idiot" bit, I mean in the "getting suspended or expelled from the bar" sense. Aside from being clearly frivolous and astonishingly ill-informed - that whole "OMGZ HE WILL STEAL THE TAX BREAKS!" thing is just unreal, coming from somebody who actually runs his own business - he seems determined to just be as flagrantly evil as possible along the way. I'm not sure how the courts are going to take this.

i'm not sure what "disclaim all interest" refers to. it could mean to the benefit of the money, but it could also mean all interest in suing carreon for abuse of process, etc. at this point, inman may be able to list some real damages.

anyway.

Quote:

there is a potential problem with the pic of the money. that could be construed as proof of a transaction to the IRS/state tax board, and then he'd be hit with somewhere around a 40% tax charge (top rate) - or around $80k. out of pocket. he could take the charitable deduction, and there's a good argument that he deserves it - he got the other people to donate en mass - so he added value to the process. but, it wouldn't make up the difference, inman would still be out of pocket.

now, i believe there are ways to get the IRS to treat it as a direct distribution from the people who donated to the charities, even with the pic, but it'd probably require some lawyering. maybe not - the IRS agents can be savvy to this stuff, and as long as there is a 1-1 transfer, he could be fine. state tax boards have been much harder to work with, of late.

the best thing would be to set up an account at the bank exclusively for the funds, work a deal with the bank to get the cash on hand in a room at the bank, inman goes to the bank for a picture with the cash, then the bank writes the cash-out checks to the charities. not sure it the charities want to be that involved, but they could be asked to accept the money in cash at the bank, and they could allow inman to get the pic. the bank might charge a bit for the transfers/cash handling - inman might have to pay that out of pocket to keep things kosher.

edit x2 - the above is probably incorrect. the donations to inman were probably outright gifts, and are not taxable income to him. it depends on the process/contract people used to get the funds to him. payment services (paypal) may try to 1099 inman, but the IRS can be notified that they were gifts, and if they are, then they won't be taxable. sorry about the above - it would only apply if inman masqueraded as a 501c3 charity (which would be illegal and fraud). if the funds aren't gifts, there might be some problems.

edit ->(from before)

sorry, one more last little paragraph on carreon's motivation: this is about a book deal. the book will sell, and it will sell enough to make him enough money to live comfortably in arizona, probably for quite a while. the only way to forestall this would be for another author (Ars?) to scoop him - and they should - they have better access to the players in this story. as far as the tax issues he's bringing up now - he's just trying to make this cost more than the extortion amount was, if inman actually takes and publishes the pic. carreon's doing a decent job, though i don't think he understands the tax issues as well as he thinks he does. i don't remember him being a tax atty (expected to be an expert in the field), so my guess is that he can get away with misconstruing the law... maybe. still, to the extent that he is misconstruing tax law, its another way to bring conduct charges against him wherever he's licensed to practice as an atty.

oh, and telephonic appearance - this is common and not something to get yer panties in a bunch about. it saves the client money (when there is one), and it's generally a good thing.

Remember all the "He may be an asshole but don't harass him" posts? Yeah screw that. Any person who thinks that keeping 200k USD from charities is ok doesn't even qualify for the most basic humane considerations.

Well, as someone that donated, I approve of my money going to any additional charities as is seen fit, as long as the first two get at least 10,000 dollars (the split of the original goal). After that, I could care less.

I'd be interested to know when Carreon donated. Was it before or after Inman announced that he'd put more charities on there?

In order to satisfy that "issue", couldn't Inman just ask for the total of money prior to that day, and have that split only going to the original charities?

Since the cartoonist keeps backtracking the lawsuit isn't as frivolous as some of you pretend.

For his sake one can only hope that his lawyers is good enough to fix it, but since he keeps coming up with new law breaking behavior they might want to take the shovel away from him entirely as he just keep finding new ways to deliver ammunition to the lawsuit.

Since the cartoonist keeps backtracking the lawsuit isn't as frivolous as some of you pretend.

For his sake one can only hope that his lawyers is good enough to fix it, but since he keeps coming up with new law breaking behavior they might want to take the shovel away from him entirely as he just keep finding new ways to deliver ammunition to the lawsuit.

Don't you ever get tired of imagining aloud that Inman did anything illegal, or even that he "backtracks?" Inman has done exactly what he said he would. He hasn't broken any laws. No lawyers commenting on the case have indicated that he has slipped up anywhere. Frankly I have no idea where you keep getting this jilted view.